At least 21 public universities in Kenya are facing possible collapse due to a worsening financial crisis, Auditor General Nancy Gathungu has cautioned.

In her latest audit for the 2023/2024 financial year, Gathungu revealed that the institutions are operating on a combined negative working capital of Sh42.5 billion.

She explained that in many cases, universities are only staying afloat because of government bailouts and creditors’ tolerance, raising doubts about their long-term sustainability.

The report paints a grim picture of the sector, showing that liabilities in most universities have surpassed their assets, leaving them unable to comfortably meet short-term financial obligations.

Gathungu further highlighted a worrying trend of annual deficits, unpaid debts, and unremitted statutory deductions factors that not only weaken financial stability but also expose the institutions to penalties and potential lawsuits.

“The survival of public universities is increasingly under threat due to persistent financial challenges and inefficiencies. A majority are operating under negative working capital positions, where liabilities continue to outweigh assets, casting doubt on their ability to meet obligations on time,” the report states.

Despite the financial struggles, the universities spent Sh62.2 billion on salaries and allowances in the year under review an amount that accounts for 62 percent of their total revenue of Sh100.7 billion.

Some institutions, such as the Technical University of Kenya and Taita Taveta University, recorded wage bills higher than their actual revenue, at 116 percent and 83 percent, respectively.

Kenyatta University topped the list of institutions with the highest negative working capital at Sh10.97 billion, followed by the University of Nairobi at Sh8 billion.

Others in deep financial distress include Egerton University (Sh7.4 billion), Jomo Kenyatta University of Agriculture and Technology (Sh6.6 billion), Moi University (Sh3.6 billion), Technical University of Kenya (Sh5.6 billion), Multimedia University of Kenya (Sh1.67 billion), and Taita Taveta University (Sh259.95 million).

Additional universities grappling with deficits include the University of Kabianga (Sh609.5 million), Technical University of Mombasa (Sh357.5 million), and Maasai Mara University (Sh280.5 million).

The Auditor General also flagged mismanagement issues such as failure to remit statutory deductions, long-pending receivables, unsupported and unbudgeted expenditures, and unreconciled accounts totaling Sh67.7 billion.

The findings raise serious concerns over the future of higher education in Kenya, with the Auditor General urging urgent reforms to restore stability and safeguard learning for thousands of students who depend on the institutions.